It’s possible to pay off your car over anything from 12 to 72 months. Choose a finance period that will suit your needs and budget, both now and during the next few years.
The sooner you pay off your car loan, the higher your monthly instalments but the less you actually pay in the end.
For example, if you pay off a car over 4 years:
|Total cost||R190,855.94 (incl. initiation fee & monthly admin fees)|
That’s R36,375.74 in interest plus R4,480.20 in fees.
With a longer finance period you pay less each month but you end up paying more interest on the loan.
For example, if you pay off the same car over 6 years:
|Total cost||R212,133.29 (incl. initiation fee & monthly admin fees)|
That’s R56,011.49 in interest plus R6,121.80 in fees.
It all depends on what you can afford each month – the more you can pay, the sooner your contract is over and the less you pay overall.
If you can’t manage a higher payment each month, then it would be wiser to look at a cheaper car or save up for a deposit (which can also reduce your instalments) than taking a longer finance period.